Public Bill Committee

[Mr. Edward O'Hara in the Chair]

Clauses 7 and 8 ordered to stand part of the Bill.

Clause 9

Monitoring officer

Question proposed, That the clause stand part of the Bill.

Yvette Cooper: I shall speak very briefly to this clause as the principles are the same as for clauses 7 and 8. It applies to the monitoring officer who is covered undersection 73 of the Greater London Authority Act 1999. The clause amends section 73 to enable the Mayor and the assembly, acting jointly, to appoint the authority’s monitoring officer and to set his terms and conditions. In addition, it has parallel arrangements to those for the head of paid service in clauses 7 and 8 to ensure that the monitoring officer is not also a member of the authority’s staff appointed by the Mayor.

Question put and agreed to.

Clause 9 ordered to stand part of the Bill.

Clause 10

Chief finance officer

Question proposed, That the clause stand part of the Bill.

Yvette Cooper: I can again be brief. The clause applies the same principles to the chief finance officer.

Question put and agreed to.

Clause 10 ordered to stand part of the Bill.

Clause 11

Amendments consequential on sections 8 to 10

Question proposed, That the clause stand part of the Bill.

Yvette Cooper: The clause makes a number of minor consequential amendments to the 1999 Act and these are consequential on the provisions in clauses 8 to 10.

Question put and agreed to.

Clause 11 ordered to stand part of the Bill.

Clause 12

Separate compnonet budgets for Assembly and Mayor

Question proposed, That the clause stand part of the Bill.

Jim Fitzpatrick: The clause amends section 85 of the 1999 Act to provide for separate component budget requirements for the Mayor and assembly. The GLA is a major precepting authority, and requires each London borough council to raise a certain amount annually from London council tax payers in its area to help fund GLA services. The 1999 Act sets out rules which the authority must follow in calculating its consolidated budget requirement which, in turn, allows the GLA to calculate the basic amount of its council tax—its precept. The GLA’s consolidated budget requirement is made up of the aggregate of the component budget requirements for the GLA itself and each of the four functional bodies.
 The clause provides that, instead of a single GLA component budget requirement, there will be separate component budget requirements for the Mayor and the assembly. The assembly’s component budget requirement is the requirement in relation to the assembly’s functions: estimates of expenditure, allowances for contingencies and use of reserves in respect of assembly members and staff, goods and services procured solely for the purposes of the assembly, and the London transport users committee, known as London TravelWatch.
 The Mayor’s component budget requirement is everything that would otherwise make up the authority’s component budget requirement. The clause provides for a transparent and discrete budget for the assembly’s functions within the existing structures of the budget-setting process. It gives London council tax payers a transparent statement of the cost of delivering the assembly’s functions and it offers the assembly the reassurance of having its own budget separate from that of the Mayor.

Michael Gove: We approve of this clause, but we have tabled some subsequent amendments that relate precisely to how the assembly’s part of the budget might be calculated. I shall try not to stray into that territory now. I shall simply say that we want our amendments to underpin the reassurance of which the Under-Secretary spoke. We believe that it is absolutely right for the purpose of transparency and in the interests of Londoners that it is perfectly clear what the Mayor is spending on his executive function and what the assembly is spending to discharge its scrutiny role. For that reason, we welcome both the terms and the intentions of clause 12, but we fear that some of the later aspects of the Bill do not live up to the good intentions that it outlines.

Tom Brake: I support clause 12. We support the principle of separate component budgets but, as the spokesman for the official Opposition—the hon. Member for Surrey Heath—says, we have concerns about the assembly’s budget. Those concerns are reflected in the amendments that are associated with clause 13, so I suspect that we will have a much longer debate on that clause.

Question put and agreed to.

Clause 12 ordered to stand part of the Bill.

Clause 13

Procedure for determining Authority’s consolidated budget requirement

Michael Gove: I beg to move amendment No. 49, in clause 13, page 13, line 4, at end insert—
‘(9A) In issuing a direction under sub-paragraph (9) above, the chief finance officer shall have regard to the separate respective statutory functions of the London Assembly and the London Transport Users’ Committee.’.
The amendment stands in the names of the hon. Members for Carshalton and Wallington and for Lewes as well as in those of my colleagues. The Minister mentioned that, as part of the London assembly’s component budget, an element exists to fund the London transport users committee, or TravelWatch. The principal aim of the amendment is to ensure that, when the budget is set, appropriate regard is taken of the specific requirements of the London transport users committee.
We appreciate that, for a variety of reasons—the consequences of public-private partnership and the tube, the Mayor’s plans for the westward extension of the congestion charge, the Mayor’s strategy on bus usage and the Mayor’s decision to move to Oyster cards rather than the former system of a payment when it comes to the use of London’s underground—Transport for London, its functions and its policies have come under increasing scrutiny since the Mayor took office, and will come under increasing scrutiny in the years ahead. It seems appropriate to acknowledge that TravelWatch is likely to become even more active on behalf of Londoners and their interests. If, as we expect, that is the case, we want to ensure that that valuable body receives the funding that it deserves—and that it does not receive it at the expense of the assembly and the scrutiny function that it discharges. The amendment would provide greater clarity and assurance for those who rely on the London transport users committee. By accepting it, the Government would show that they were serious about taking account of the views of Londoners when it comes to important transport matters.
Finally, most of the transport issues that I have touched on relate to the speed and confidence with which Londoners can travel around the capital city. However, there is another area to which the London transport users committee might wish to pay increasing attention: security and safety. None of us can have failed to be moved by the resilience and stoicism of the family of Tom ap Rhys Pryce following his murder in Brent last year. His murder underlined the growing concern of many that travel round London is less secure than once it was. We appreciate the part that the Metropolitan Police Authority, the Metropolitan police and British Transport police play in trying to ensure the safety of all travellers. However, it is vital that the body that speaks for London transport users should have a chance to have an enhanced budget so that its role in trying to provide increased or enhanced security for London transport users is respected.

Dawn Butler: The hon. Gentleman mentions the sad murder of Tom ap Rhys Pryce in my constituency. As the Member of Parliament who campaigned strongly for safer stations, I can assure you that the Mayor was fundamental in ensuring not only that we had extra British Transport police on the stations but that the Metropolitan police and the rail companies took the issue very seriously.
It is beneficial to have a Mayor of London with the total responsibilities that he has now, so that he can make decisions in the way that he does—sometimes quickly. As you know, he will take over responsibility for Silverlink at the end of the year. I am not quite sure how you are relating that to your argument, because I found the current structure to be extremely beneficial, as did Tom ap Rhys Pryce’s family.

Edward O'Hara: Order. Before we proceed, I point out to the hon. Lady that she should address her remarks through the Chairman.

Michael Gove: I am grateful to the hon. Lady for making that point. Her stance in support of Tom ap Rhys Pryce’s family and the support that she has shown to people who use the Tube station in her constituency are well recognised within and outside the House. I appreciate the burden of her comments about the Mayor. I do not think that anyone is taking anything away from the Mayor and the discharge of his duties in discussing the importance of TravelWatch. The Mayor reacted with compassion, speed and efficiency to deal with some of the problems highlighted by that tragic event.
Tom ap Rhys Pryce’s murder resonated across London because concerns about travel and transport safety had risen up the political and public agenda. As they continue to do so, we believe that the body that speaks for Londoners in that regard is likely to wish to speak more often on such issues. I suspect that when it does, the Mayor will respond sensitively and quickly, but we want to ensure that the body that explicitly allows London transport users to raise their voices has the protected resources that it deserves.
When we talk about safety in travel, it is not just that tragic murder that rests on our minds; it is also the tragic murder of those killed on 7 July 2005. A number of bodies, including the London Fire and Emergency Planning Authority, have played a significant role in ensuring that London’s resilience is enhanced and that London transport is as safe as possible in the event of a terrorist attack, but I think that all of us are concerned to see that the experience of those who use London transport is reflected in any decisions taken by the Mayor and functional bodies when it comes to providing security in the event of such an attack or any other assault on London’s resilience.
All of us can see a number of reasons why London transport users might wish their voices to be amplified. TravelWatch provides a way of doing so, and we would like its budget to be secured so that it does not suffer as a result of any future budget changes reflecting on the work of the assembly.

Dawn Butler: Does the hon. Gentleman agree with me on two points? First, it was a good thing for the Mayor to take responsibility—it cost each taxpayer about 2p to ensure an extra 89 British Transport police on the railways. Secondly, when the Opposition were in power and broke up the railways, it hindered the current safety of our stations.

Michael Gove: With her first comment, the hon. Lady is making a valid point. Particularly now that we are dealing with an increase in violent crime and attacks from strangers under this Government, and are also suffering under an increased terrorist threat, for a variety of reasons with which we are all familiar, it is appropriate to recognise that increased spending on security and an enhanced police presence in all our stations is worthwhile. We agree with that.
In her second point, the hon. Lady is inviting me to revisit the question of railway privatisation, which I think sits outside the scope of the Bill. It is sufficient for me to say that I hope that we can discuss Transport for London later in greater detail. All that the amendment was intended to do—I am sure that hon. Members on the Liberal Democrat Front Bench are inclined to agree with me—was to ensure that as concern about London Transport rises up the agenda, the voice of Londoners is amplified appropriately, that money is found to ensure that their concerns are respected and that it is found in a way that will not impair the assembly’s scrutiny function.

Tom Brake: I support the amendment. I hope that the Minister will take it as a constructive one. That is clearly the intention of the official Opposition and the Liberal Democrats. The amendment is about greater transparency in funding for the assembly and TravelWatch, and it is about ensuring that any variation in funding for one organisation or another is clearly visible, so that one party does not suffer as a result of another receiving an increase in funding. I hope that the Minister can take on board this quite simple but constructive amendment.

Andrew Pelling: The cross-party interest of London assembly members in the amendment was to ensure both the best interests of London TravelWatch and the assembly itself, in providing cognisance for the chief financial officer to ensure that the demands of London TravelWatch could be accommodated, if required, in line with how the Bill’s other clauses set a maximum spend on the assembly—such that its work, and that of London TravelWatch, should not be compromised. The cross-party approach in the assembly, which I hope will also be seen in Committee, was that this entirely constructive approach was intended to be flexible, to ensure the good work both of the assembly and of London TravelWatch.

Jim Fitzpatrick: I understand and acknowledge the concern behind this amendment, and the constructive way in which Opposition Members have moved it. It means that any change to the statutory functions of the London transport users committee, otherwise known as London TravelWatch, could lead to a significant increase in the assembly’s component budget requirement. I fear that the amendment does not achieve what Opposition Members intend, and in any event I do not believe there is any need to make the sort of provision they have in mind.
Hon. Members will know that, under clause 12, the LTUC budget forms part of the assembly’s component budget, as we have just agreed. A significant change in LTUC’s budget requirement could, in turn, have some bearing on the amount of the assembly’s component budget requirement. Clause 13 allows the GLA’s chief finance officer to direct that specific amounts should be left out of the calculation for determining this limit in order to deal with unusual, one-off expenditure items. However, that power relates amounts to include or exclude from the Mayor’s budget in order to calculate its percentage change between the current and previous years, and therefore the limit by which the assembly can increase its own budget. The chief finance officer’s power of direction is intended to deal with unusual, one-off items in the Mayoral budget, such as the Olympic precept.
Placing a duty on the chief finance officer to have regard to the functions of the assembly and of LTUC in issuing a direction will have no bearing on the content. In any event, we see no need to draw a distinction between LTUC and the assembly component budget as a whole. LTUC’s budget forms only a proportion—less than 20 per cent., as I am sure hon. Members are well aware—of the assembly’s overall budget. Any changes to LTUC’s functions, and therefore to its budget requirement, is unlikely to have a significant bearing on the total budget requirement of the assembly. Any change in LTUC's statutory duties would need primary legislation to have effect. It would be appropriate to consider any funding issues resulting from such changes at the same time as any legislation is taken forward.
I do not therefore believe that this amendment would serve the desired purpose. I hope that, with these reassurances, the Opposition Members will withdraw their amendment.

Michael Gove: I appreciate the generous words with which the Minister began his comments, but as he went on I became progressively disappointed. All that we thought to do was to ensure that the LTUC and assembly budgets were both amply protected. I recognise the Minister’s point that no new functions have been given to LTUC as a result of the statute, but I will outline various reasons why—as a result of decisions taken by the Mayor, other factors occurring in London and, indeed, globally—concerns about Transport for London, plus the anxieties and security of London transport users, needed to be respected. My belief is that the body speaking for London transport users is likely to need more resources in the future, to ensure that those anxieties are effectively voiced and that the security of transport users is effectively respected.
Nothing that the Minister said suggested that that is unlikely to happen or that any of my worries were ill founded, but if it were likely we would inevitably see LTUC doing more and, given the way in which the component budget is calculated, it means that the resources for the assembly and its scrutiny function would be less. Given how the budget is constructed, Peter will have to be robbed to pay Paul. Our amendment is an opportunity to ensure that both Peter and Paul have their views respected.

Jim Fitzpatrick: I fully understand the points that the hon. Gentleman is making. Given the nature of LTUC’s constitution—in that it is an animal of the assembly and thus is accountable to the assembly and appointed by it—does he not believe that, were LTUC to require additional financing that was acknowledged by the assembly, it could make the appropriate bid to the Mayor and it would be accepted? Moreover, because of the Mayor’s personal interest in transport, would it not recognise that there might indeed be an increased budget requirement for LTUC? Why does the hon. Gentleman think that, when it comes to the assembly asserting itself with the majority and showing a common purpose—a two thirds majority could be achievable in certain circumstances—the assembly might not be able to achieve the objective of an increased budget for LTUC, were that to be desired?

Michael Gove: I am grateful to the Minister for that intervention. If the amendment were not accepted, the assembly might make the case to the Mayor for an increase in its own budget to make sure that LTUC’s functions could be enhanced effectively. However, that inevitably takes us into the territory that we shall be covering under the next group of amendments, when we shall discuss how the assembly’s budget can be protected overall and the powers that it has to amend the budget.
If the assembly wished to amend the budget specifically to achieve that particular goal, it would not be able to do so under the cumbersome and limited powers that it has to amend the budget at present. Without having to pre-empt that process, acceptance of the amendment would deal with that problem. I hope that the Minister will think again about such matters, even at this late hour.
I also hope that Labour Back Benchers will reflect on the amendment. It is clear from what he said that the Minister was outlining the Government’s position and that he was doing so with his customary attention to duty. However, I appeal to Labour Back Benchers to think about the worries of their constituents about London transport. Whether or not they voted for the Mayor, I am sure that they would want the body that speaks for them to have its finances protected effectively.

Andrew Pelling: Does my hon. Friend agree that the Minister has conceded that the assembly should have the ability on a two-thirds vote to have a line-by-line amendment on the budgets within the GLA family? Surely the fact that the assembly should have the ability to impose its will through the budgetary process on spending on a particular line within the budget lies behind his suggestion.

Michael Gove: I thank my hon. Friend very much for that intervention. His comments are not a legitimate inference, but the only logical conclusion of the Minister’s remarks. The hon. Gentleman was referring in particular to the opportunity that the assembly might have to request a specific amendment to the budget to ensure that it was increased and that LTUC was adequately funded. That is a specific example of a line item change. We are proposing a line item change on the two-thirds majority vote, so I should be interested to see the Minister carry through the logic of his previous intervention in later proceedings. If he does not, I would be interested to know why. I am grateful to my hon. Friend for making such a valuable point.
I return to the broader point that I wish to put to Labour Back Benchers. If they vote with the Government on the matter, they will have to ask themselves why they are denying their constituents effective funding for the voice that speaks up for them on travel issues. We have heard from the hon. Member for Brent, South about a case in her constituency and we know how effectively she championed the relatives of the victim. There is no question but that Labour Members have a proud tradition when it comes to championing the interests of their constituents on matters of security and personal safety. Therefore, it would be all too great a shame if they were to troop loyally behind the Government on this vote, rather than siding with their constituents’ interests at a time of growing concern about safety on road and rail.

Jim Fitzpatrick: The hon. Gentleman clearly indicates that we are not going to agree on the principle and I am not sure that we agree about what I was trying to convey a few moments ago.
My secondary point, which the hon. Gentleman has not addressed, is that the chief finance officer’s power of direction is only intended to deal with the Mayor’s aspect of the budget; therefore, the amendment does not produce the desired effect and is technically flawed.

Michael Gove: I take the Minister’s point, but we are seeking to give the chief finance officer a new, specific power to deal with a new, specific situation. The chief finance officer should not intervene in the disposition of the assembly’s budget. My hon. Friend the Member for Croydon, Central tabled an amendment to protect the assembly’s disbursal of its own budget, but sadly it was not selected. Nevertheless, because this situation is unique—we are talking about the one body in the assembly that has its own specific, discrete budget—we wish to deal with it by means of a specific amendment that will, if agreed, have specific force. The chief finance officer will then have to take account of the will of the House and, in so doing, he will give more effective protection to London transport users. I hope that Labour Back Benchers will, on this occasion, side with the interests of their constituents against the Government and administrative convenience.

Question put, That the amendment be made:—

The Committee divided: Ayes 6, Noes 10.

Question accordingly negatived.

Michael Gove: I beg to move amendment No. 43, in clause 13, page 13, line 12, at end insert—
‘(5A) After paragraph 5A insert—

“Limit on the Mayor’s powers to prepare a draft budget for the Assembly

5B (1) In exercising his powers to prepare a draft component budget for the Assembly under paragraph 2 above, the Mayor must not prepare a draft component budget for the Assembly that is less than the minimum draft component budget requirement for the Assembly.
(2) Find the minimum draft component budget requirement for the Assembly as follows.
(3) If NM is greater than OM (as calculated under paragraph 5A(5) above) the minimum draft component budget requirement for the Assembly is as if NM equals OM.
(4) If NM is less than OM (as calculated under paragraph 5A(5) above) find the percentage by which NM is less than OM, and reduce the amount of the component budget requirement for the Assembly for the previous financial year by the same percentage.
The result is the minimum draft component budget requirement for the Assembly.
(5) If NM equals OM (as calculated under paragraph 5A(5) above) the minimum draft component budget requirement for the Assembly equals the amount of the component budget requirement for the Assembly for the previous year.
(6) Subsections (9) to (11) of paragraph 5A above shall have effect for the purposes of this paragraph.”.’.

Edward O'Hara: With this it will be convenient to discuss the following:
Amendment No. 60, in clause 13, page 13, line 12, at end insert—
‘(5A) After paragraph 5A insert—

“Limit on the Mayor’s powers to prepare a draft budget for the Assembly

5B (1) In exercising his powers to prepare a draft component budget for the Assembly under paragraph 2 of Schedule 6 above, the Mayor must not prepare a draft component budget for the Assembly if the draft component budget contravenes sub-paragraph (2) below.
(2) The Mayor’s draft component budget contravenes this sub-paragraph if—
(a) the draft component budget for the Assembly is less than
(b) the minimum draft component budget requirement for the Assembly.
(3) Find the minimum draft component budget requirement for the Assembly as follows.
(4) If NM is greater than OM (as calculated under sub-paragraph (5) of paragraph 5A of Schedule 6 to this Act)—
(a) find the percentage by which NM is greater than OM, and
(b) reduce the amount of the component budget requirement for the Assembly for the previous financial year by the same percentage.
The result is the minimum draft component budget requirement for the Assembly.
(5) If NM is less than OM (as calculated under sub-paragraph (5) of paragraph 5A of Schedule 6 to this Act)—
(a) find the percentage by which NM is less than OM, and
(b) reduce the amount of the component budget requirement for the Assembly for the previous financial year by the same percentage.
The result is the minimum draft component budget requirement for the Assembly.
(6) If NM equals OM (as calculated under sub-paragraph (5) of paragraph 5A of Schedule 6 to this Act) the minimum draft component budget requirement for the Assembly equals the amount of the component budget requirement for the Assembly for the previous year.
(7) Sub-paragraphs (9) to (11) of paragraph 5A of Schedule 6 to this Act (power of chief finance officer to direct amounts to be left out of account) also have effect for the purposes of this paragraph.’.
Amendment No. 33, in clause 13, page 13, line 16, at end insert—
‘(6A) In paragraph 8 in sub-paragraph (4) for “at least two-thirds” substitute “a simple majority”.’.
Amendment No. 41, in clause 13, page 13, line 16, at end insert—
‘(6A) For sub-paragraph (4) of paragraph 8 substitute—
“(4) For the purposes of sub-paragraph (3) above, the only amendments which are to be made—
(a) to the final draft component budget for the Mayor are those agreed to by at least two-thirds of the Assembly members voting, and
(b) to the final draft component budget for the Assembly are those agreed to by at least a simple majority of the Assembly members voting.”.’.
Amendment No. 44, in clause 13, page 14, line 24, at end insert—
‘(8) After paragraph 8A insert—

“Limit on the Mayor’s powers to prepare a draft budget for the Assembly

8B (1) In exercising his powers to prepare a final draft component budget for the Assembly under paragraph 2 above, the Mayor must not prepare a draft component budget for the Assembly that is less than the minimum final draft component budget requirement for the Assembly.
(2) Find the minimum final draft component budget requirement for the Assembly as follows.
(3) If NM is greater than OM (as calculated under paragraph 5A(5) above) the minimum draft component budget requirement for the Assembly is as if NM equals OM.
(4) If NM is less than OM (as calculated under paragraph 5A(5) above) find the percentage by which NM is less than OM, and reduce the amount of the component budget requirement for the Assembly for the previous financial year by the same percentage. The result is the minimum final draft component budget requirement for the Assembly.
(5) If NM equals OM (as calculated under paragraph 5A(5) above) the minimum final draft component budget requirement for the Assembly equals the amount of the component budget requirement for the Assembly for the previous year.
(6) Subsections (9) to (11) of paragraph 5A above shall have effect for the purposes of this paragraph.”.’.
Clause stand part.
Amendment No. 34, in clause 14, page 15, line 44, at end insert—
‘(2A) In paragraph 7 in sub-paragraph (4) for “at least two-thirds” substitute “a simple majority”.’.
Amendment No. 42, in clause 14, page 15, line 44, at end insert—
‘(2A) For sub-paragraph (4) of paragraph 7 substitute—
“(4) For the purposes of sub-paragraph (3) above, the only amendments which are to be made—
(a) to the final draft component budget for the Mayor are those agreed by at least two-thirds of the Assembly members voting, and
(b) to the final draft component budget for the Assembly are those agreed to by a simple majority of the Assembly members voting.”.’.
Amendment No. 45, in clause 14, page 15, line 44, at end insert—
‘(2A) After paragraph 4A insert—

“Limit on the Mayor’s powers to prepare first draft budget for the Assembly

4B (1) In exercising his powers to prepare a first draft component budget for the Assembly, the Mayor must not prepare a first draft component budget for the Assembly that is less than the adjusted minimum first draft component budget requirement for the Assembly.
(2) Find the adjusted minimum first draft component budget requirement for the Assembly as follows.
(3) If NM is greater than OM (as calculated under paragraph 5A(5) above) the minimum draft component budget requirement for the Assembly is as if NM equals OM.
(4) If NM is less than OM (as calculated under paragraph 5A(5) above) find the percentage by which NM is less than OM, and reduce the amount of the component budget requirement for the Assembly for the previous financial year by the same percentage.
The result is the adjusted minimum first draft component budget requirement for the Assembly.
(5) If NM equals OM (as calculated under paragraph 5A(5) above) the adjusted minimum first draft component budget requirement for the Assembly equals the amount of the component budget requirement for the Assembly for the previous year.
(6) Subsections (9) to (11) of paragraph 5A above shall have effect for the purposes of this paragraph.”.’.
Amendment No. 46, in clause 14, page 17, line 8, at end insert—
‘(4) After paragraph 7A insert—

“Limit on the Mayor’s powers to prepare final draft budget for the Assembly

7B (1) In exercising his powers to prepare a final draft component budget for the Assembly under paragraph 2 above, the Mayor must not prepare an adjusted draft component budget for the Assembly that is less than the adjusted minimum final draft component budget requirement for the Assembly.
(2) Find the adjusted minimum draft component budget requirement for the Assembly as follows.
(3) If NM is greater than OM (as calculated under paragraph 5A(5) above) the minimum draft component budget requirement for the Assembly is as if NM equals OM.
(4) If NM is less than OM (as calculated under paragraph 5A(5) above) find the percentage by which NM is less than OM, and reduce the amount of the component budget requirement for the Assembly for the previous financial year by the same percentage.
The result is the adjusted minimum final draft component budget requirement for the Assembly.
(5) If NM equals OM (as calculated under paragraph 5A(5) above) the adjusted minimum final draft component budget requirement for the Assembly equals the amount of the component budget requirement for the Assembly for the previous year.
(6) Subsections (9) to (11) of paragraph 5A above shall have effect for the purposes of this paragraph.”.’.
Clause 14 stand part.
New clause 4—Approval of Mayor’s final draft budget by Assembly
‘In Schedule 6 to the GLA Act 1999 (procedure for determining the Authority’s consolidated budget requirement), paragraph 8(4) is omitted.’.
New clause 16—Assembly consideration of Mayor’s draft budget
‘In Schedule 6 to the GLA Act 1999 (Procedure for determining the Authority’s consolidated budget requirement), leave out paragraph 5(4) and insert—
“(4) For the purposes of sub-paragraph (3) above, amendments which are to be made must be agreed to by a simple majority of the Assembly members voting.”.’.
New clause 17—Assembly consideration of Mayor’s draft budget (No. 2)
‘In Schedule 6 to the GLA Act 1999 (Procedure for determining the Authority’s consolidated budget requirement), leave out paragraph 5(4) and insert—
“(4) For the purposes of sub-paragraph (3) above, amendments including those which amend the aggregates calculated in subsections (4) to (7) of section 85 are to be agreed by a two-thirds majority of the Assembly members voting.”.’.
New clause 18—Calculation of component and consolidated budget requirements
‘In section 85 of the GLA Act 1999 (calculation of the component and consolidated budget requirements), after subsection (4) add—
“(4A) For the purposes of subsection (4) above, the aggregates must be calculated to include amendments agreed to by a two-thirds majority of the Assembly members voting.”.’.
New clause 19—Assembly’s power to allocate its budget
‘(1) Schedule 6 to the GLA Act 1999 (procedure for determining the Authority’s consolidated budget requirement) is amended as follows.
(2) After paragraph 9 insert—

“Assembly’s power to allocate its budget

9A The Assembly may, following consultation with the head of the Authority’s paid service, the Authority’s monitoring officer and the Authority’s chief finance officer, allocate monies which it receives under the component budget for the Assembly in such a manner as it sees fit.”.’.

Michael Gove: This group of amendments, and the debate on the various clauses, relates to the budget functions of the Mayor and the assembly. The Minister has already acknowledged, in his discussion on clause 12, that we should have a clearer and more transparent division of the budget for the Mayor and the budget for the assembly. I do not need to rehearse at length the arguments about why that should be so. The Mayor’s functions are relatively clear. We have heard Labour Back Benchers talking about the importance of preserving the Mayor’s executive functions and heard from all parties about the importance of recognising the assembly’s specific scrutiny functions. At various points, we have sought—and will seek—to enhance the assembly’s scrutiny functions. So far, of course, every attempt to do so has been beaten back by the Government, but we will carry on regardless.
If the assembly is to ensure that its scrutiny functions are effectively safeguarded, it has to ensure that its budget for those functions is effectively safeguarded. We are concerned that the Bill gives the Mayor the potential power to pillage or ransack the budget for scrutiny. We are not suggesting that the current Mayor wishes to exercise it, but a future Mayor might.
The complex formula in the Bill will allow the assembly to permit its budget and the Mayor’s budget to expand in tandem. If the Mayor’s budget increases, the assembly’s budget can increase, but not by an amount greater than the Mayor’s. It seems broadly sensible that there should be a ceiling to the assembly’s budget. The assembly can never grow like Topsy, and its budget can grow only in proportion to the growth in the Mayor’s budget and in the functions that the Mayor and assembly bodies discharge.
So far, so good, but although there is a ceiling, there is no floor. The formula does not prevent the Mayor from reducing the assembly’s budget and paring it to the bone. It is entirely possible that a future Mayor, tiring of the effect of the scrutiny to which the assembly is subjecting his policies, might—with the help of lackeys in the assembly—seek to introduce a budget that would deprive the assembly of the necessary funding to discharge its duties.
 Two different amendments seek to deal with that point—one in the names of myself and my hon. Friends and one in the names of the hon. Members for Carshalton and Wallington and for Lewes. My party’s amendment seeks to ensure that the assembly can effectively control where the floor is set. The amendment in the names of the hon. Members for Carshalton and Wallington and for Lewes proposes what I believe is called an envelope, such that the assembly’s budget cannot be reduced by more than any increase in the Mayor’s budget—you pays your money and you takes your choice. Naturally, we believe that our system would be superior, but I look forward to hearing the arguments of the hon. Member for Carshalton and Wallington in favour of his system—his logic can sometimes be seductive. Both amendments are intended to ensure that the assembly’s budget is protected. Interested as I am in the Liberal Democrat arguments, I am even more interested in the Minister’s arguments as to why that protection should not exist. If one accepts the logic of having a ceiling, as we do, why not accept the logic of having a floor?
In the previous debate, one of our aims was to ensure that the assembly’s scrutiny functions should not be impaired by the devolving on to the LTUC of any additional responsibilities. In the same way, we believe that those functions should not be impaired by a future Mayor who might seek to ravage the assembly budget.
I turn now to another issue—how the budget can or should be amended. At present, there is provision for amendment of the total budget by a two-thirds vote of the assembly. Given the particular arithmetic of the GLA, that means in effect that the Mayor and potentially one other party, or one other party and one or two other assembly members, could ram through a budget that suits their interests. That would be particularly likely if the Mayor and his party were to have a successful run at the polls. We seek to safeguard the majority of Londoners from such a minority siding with the Mayor to pass a budget that would not be in the interests of all London. We want the overall budget to be amendable by simple majority.
I mentioned earlier something that it is importantto recognise. The proportional representation and additional member system in the assembly means that a simple majority requires an alliance involving more than one party. Under the current system, the Mayor could get his budget through with the adherence of potentially just one party, whereas our proposal would require the consent of two parties. In effect, that would be a majority of all voting Londoners who had cast votes in GLA elections.

Martin Linton: Will the hon. Gentleman confirm that the only election in the British isles in which the winner is required to have more than 50 per cent. of the vote to win is that for Mayor of London?

Michael Gove: I have more than 50 per cent. of the vote in Surrey Heath and the Minister for Housing and Planning had considerably more than 50 per cent. of the vote in her constituency. Many of us enjoy a mandate that would allow us to sit in this House under any voting system. I take the hon. Gentleman’s point that by dint of the voting system by which he or she is elected the Mayor enjoys, in effect, the confidence of50 per cent. of those voting, but no Mayor has won outright on the first ballot, and I suspect that no Mayor will do so in the future. The system that we have chosen for the election of the Mayor allows someone to cast a second or even a third vote for whoever they consider to be second or third among all the evils.
I appreciate that the freedom that the voting system gives to people to express a second or third preference means that in some respects the Mayor has a better mandate than some other elected representatives in this country, but the GLA was set up to recognise that the Mayor has a strong mandate, but so does the London assembly. They have mandates of equal validity.
The changes that we seek to make will ensure that the assembly’s voice in shaping the budget is enhanced; it will not be just one party in the assembly that can exercise disproportionate power, if it happens to be in alliance with the Mayor, over the shape of the budget, but at least two parties representing a majority of London voters.

Andrew Pelling: As we have started to debate percentages of votes, does my hon. Friend think that this Parliament would have much credibility if the Government could pass their budget on a third of the votes?

Edward O'Hara: Order. We should not go down that road.

Michael Gove: Thank you, Mr. O’Hara. My hon. Friend has made an extravagant analogy, but it was very much Ã point. He is absolutely right to point out that many people will question how a budget can be passed by the Mayor and just a third of the assembly, when nearly two thirds of that assembly are unhappy with the budget proposal. People will ask how effective is the scrutiny role of the GLA when more than a majority in the GLA—more than 60 per cent.—are opposed to what the Mayor wishes to do, yet the Mayor can carry on willy-nilly. People think that the scrutiny function of the GLA is weaker than it needs to be.
To move from the theoretical to the practical, we are all aware that the GLA precept has increased significantly. We will come later to subsequent amendments that will allow the people of London to discover just how much that precept is increasing and will make more transparent the additional costs imposed on them by the Mayor. Given the rise in the Mayor’s budget, it seems appropriate that the scrutiny function should be enhanced, too.

Karen Buck: Is it not also the case that Londoners would be confused about why a Mayor with executive powers and a clear mandate should be stymied in effectively carrying out those powers by political parties that do not have the same mandate and which are working together merely to make political points and to prevent the Mayor from carrying out the duties for which they were elected?

Michael Gove: The hon. Lady has referred to the executive role of the Mayor, which she understandably wishes to protect. We recognise that the Mayor and the GLA are unique in this case, but we should consider other examples of executive authority. For example, let us look across the Atlantic, as we have done already in our debates. Budgets are set by the Executive in the United States of America, but when it comes to the exercise of scrutiny by Congress, a majority there can prevent the exercise of executive functions. We recognise that a majority in any scrutinising body can, when appropriate, hold the executive to account and say, “I’m terribly sorry, but on this occasion you are mistaken.”

Martin Linton: Is this not rather a bad time to quote the example of the United States? As it does from time to time, the doctrine of the separation of powers has thrown up the constitutional nonsense by which the Executive is from one party and the legislature has a majority from the other party. Whatever one’s views, one must agree that that is a bad thing, which will lead to complete gridlock in the United States for the next two years. Is that what the hon. Gentleman wishes on the people of London?

Michael Gove: I am tempted to say, on the basis of my efforts to drive on the streets of London, that gridlock is what we already have.
 On the specific case mentioned by the hon. Gentleman, one of the interesting things about the American system, and about the system of cohabitation in France, is that when it occurs, people often say “Quelle horreur”, or “Dang nabbit, blow me down”, depending on which country one hears it from. The truth is that the check on the power of the Executive that comes from cohabitation, or from the situation in America, can be more beneficial than total executive control of all branches of government. It was during a period when there was a Republican Congress and a Democrat President that welfare reforms, which contributed to a lower level of unemployment and to budget deficit reductions, were introduced.
I mention that because, in principle, forcing an Executive to engage more closely with a scrutinising body compels the former to make a stronger and better case for their proposals. We all know that bad laws tend to come about when an Executive can count on a massive majority in a legislative body. We all knew—the Prime Minister has acknowledged this—that better legislation might come about when the Government’s majority was reduced. We recognise that when an Executive is compelled to treat with those who have the power of scrutiny, we get enhanced legislation as a result.
I fear that the hon. Gentleman’s argument is flawed. The only thing that I will say in conclusion about the hon. Gentleman’s argument is that he must be the only member of the Labour party who is disappointed that the Democrats took control of Congress last year.

Andrew Slaughter: This is an interesting debate. I was sitting here being seduced by the hon. Gentleman’s argument. Admittedly, I was drifting in and out of sleep while doing so. None the less, I was brought up short by my hon. Friends, who have brought me back to the real world.
The hon. Gentleman has said that the assembly and the Mayor have equal mandates. That is true, but it is a little bit of a sophistry, because there is the question what the mandates are for. As my hon. Friend the Member for Regent’s Park and Kensington, North has said, the Mayor has an executive mandate and the assembly has a scrutiny mandate. It may frustrate some members of the assembly that that is all that they get, although they are handsomely rewarded for sitting on a rather ineffectual scrutiny body. However, that is how the body was envisaged. Is the hon. Gentleman saying that he wishes to change the whole format and purpose of the Greater London authority, and to turn the assembly from a scrutiny body into what will effectively be a second-guessing executive body?

Michael Gove: I am grateful to the hon. Gentleman for that intervention. However, he misunderstands not only the Bill but the legislation that has already been enacted.
The assembly can already change the Mayor’s budget, if it manages to get the two-thirds majority required. Far from being an ineffectual scrutiny body, the GLA can be a powerful one, if it can command the votes required. The amendment would ensure that the power of the GLA to be a powerful scrutiny body is exercised more often. The principle has been conceded, and we are simply discussing numbers.
I am reminded of the off-colour joke about the lady who, when she was asked whether she would sleep with someone for £100, said no. When she was asked whether she would do it for £1 million, she said yes and asked, “What do you take me for?”

Stephen Pound: I am sure that the Committee wants to know that that is not an off-colour joke. It was a discussion between Mrs. Patrick Campbell and George Bernard Shaw on a train.

Michael Gove: I am grateful to the hon. Gentleman for sparing me any more blushes and embarrassment, but we all know what we are talking about. The principle has been conceded, and we are simply discussing numbers. It seems entirely appropriate that we should give the assembly the power to scrutinise effectively—I believe that most Londoners imagine that it has that power—rather than allowing its scrutiny functions to be impaired by the actions of just one party.

Martin Linton: I cannot let the hon. Gentleman leave the Committee with the impression that the mandate of the minority parties at city hall is as valid as, or equivalent to, that of the Mayor. Not only does the Mayor have more than 50 per cent. support—including second-choice votes, as there is no third choice in London, which the hon. Gentleman might not know as a Member from outer Surrey—but when people vote for the Mayor they know that they are voting for the executive. When they are voting for GLA members, they know that they are voting for scrutineers. They make the choice with that knowledge, so it is completely wrong to suggest that the Mayor has no better a mandate than the assembly. He has a clear mandate as the executive, and members of the GLA, whether they are on the list or represent constituencies, have mandates from their constituents as scrutineers of the GLA.

Michael Gove: I am grateful to the hon. Gentleman for his intervention. Before I was lucky enough to be selected as the candidate for Surrey Heath, I voted in a mayoral election. I hasten to add that I did not vote for the incumbent.

Greg Hands: Dobson?

Michael Gove: And not, indeed, for the Labour party candidate, Mr. Dobson, tempting though it was. One reason for voting for Mr. Dobson would have been that our party leader at the time, my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith), was leading a campaign to help the vulnerable, and I can think of no more effective way to have done that. There was also Steve Norris, who, as I remember, was the Daily Mirror candidate for the post. [Interruption.] Enormously to his credit. My memory might be playing me false—it often does—but I remember thinking at the time about who to place as my second, third and other preferences. I am grateful to the hon. Member for Battersea for stressing that one has only a first and a second preference.
The hon. Gentleman’s more substantial point was that Londoners cast their votes knowing that they are voting for an executive Mayor and a group of scrutineers. As my hon. Friend the Member for Bromley and Chislehurst said from a sedentary position, that fine constitutional distinction is, of course, the talk of London’s pubs and, I imagine, of the stand at Craven Cottage. However, I imagine that most of those who appreciate that the GLA assembly exists with a scrutiny role would want to see that role enhanced rather than diminished. That is the point of the amendment.

Andrew Pelling: As one who admits to having voted for Livingstone as my second preference, may I ask my hon. Friend to help me to understand the debate? The hon. Member for Battersea put special magic on the figure of 50 per cent. Why cannot that figure apply to the assembly?

Michael Gove: Once again, my hon. Friend makes an immensely valuable point. The hon. Member for Battersea talked about the Mayor’s mandate and said that 50 per cent., or cresting over it, is the magical total. If so, why cannot the assembly amend the budget if it manages to get 50 per cent. of the votes plus one? If the logic applies to the power of the Mayor, it must apply a fortiori to the assembly because, as we know, no Mayor has yet secured 50 per cent. of the vote on the first ballot. He relies on votes transferred from other parties.
As we have acknowledged, the voting system for the assembly means that reaching 50 per cent. would require more than one party to unite to secure an amendment, whereas, given the arithmetic of the assembly, it is perfectly possible for the Mayor, relying on the votes of one party, to block amendments.

Martin Linton: If the hon. Gentleman and the hon. Member for Croydon, Central want an answer, I am quite happy to give it. The latter is the only member of the Committee whom I can look down on, because my majority of 163 is twice as big as his, which is 75. We are both familiar with the importance of majorities. The Mayor has an even stronger mandate than 50 per cent. of the assembly because when the voters of London were asked who they wanted to have executive power over the budget in London—they were choosing between Mr. Norris, Mr. Livingstone and many others—their answer was Ken Livingstone. They were not asked a similar question about the parties standing for the assembly and they did not give a similar answer.

Michael Gove: The hon. Gentleman, like the hon. Member for Regent’s Park and Kensington, North, appears to be attached to the strong executive powers of the Mayor. It will be interesting to see how attached he remains to those powers after the next election, when, of course, the boot will be on the other foot.
However vigorously the Mayor discharges his executive powers, we are entirely consistent in recognising that when the legislation was introduced, it was perfectly clear that the assembly would have an equally valid mandate. As my hon. Friend the Member for Croydon, Central, asked, if the hon. Member for Battersea is attached to the majoritarian principle, why should it not apply to the assembly as well in one of its few scrutinising functions? Throughout the debate, we have been trying to enhance the role of the assembly, and will continue to try later in the consideration of the Bill. We have been rejected at every turn, however. In the one area in which the assembly clearly has a role that has been acknowledge by the Government, why should it not be enhanced in an appropriate way that is in line with the logic that was outlined earlier?
We are anxious to see one other element accepted: as well as the principle of a simple majority accepting or rejecting the total budget, we should introduce a line-item veto, to borrow a term from across the Atlantic. A number of members of the assembly and others have expressed the view that under the current budget-setting process, it is simply a case of taking or leaving the whole pot. When it comes to a Finance Bill in the House, for example, or the budget-setting process in the United States, we all know that it is possible to seek to amend individual parts of that budget. It would be valuable for the assembly be able to do so, because that would help to make transparent its priorities and the distinct priorities of the Mayor. It would be appropriate to say that there are certain aspects of the budget, such as pet projects of the Mayor for which he may not have sought a mandate when he was elected, that the assembly wishes to highlight and either delete or amend, or perhaps even enhance.
A key aspect of the line-item veto that we propose is that it should require a two-thirds majority. We recognise that the specific ability to alter the budget in that way should be used only if an overwhelming majority of the GLA is convinced of the rightness of the change. The amendment respects the executive power of the Mayor. We are not seeking to deprive him of his key leadership role, but we are seeking to institute a safeguard to ensure that if he proposes items in his budget for which he has no mandate, which may be eccentric, capricious or brazenly ideological, or which he proposes for partisan reasons, the GLA will be able to draw them to wider attention or delete them if there is a requirement to do so.

Stephen Pound: The hon. Gentleman has been extraordinarily generous, if not over-discriminatory, in accepting interventions. With my hon. Friends the Members for Regent’s Park and Kensington, North, and for Mitcham and Morden, and the then Member for Brent, East, I spent night after night after night on the GLA Bill Committee. We discussed the matter at great length. I am concerned, if not entirely seduced, by what the hon. Member for Surrey Heath says because many London assembly members share the concerns that he articulated, which alone gives me pause for thought.
In the Committee that considered what became the 1999 Act, we debated whether a simple-majority process would be the answer, as applies in most other legislatures in the UK. We came to the conclusion that the subtlety of the GLA structure, with its internal checks and balances, made a simple majoritarian process impossible, because it was an election not of equals but of separate mandates. Is the hon. Gentleman saying that a simple majoritarian principle should apply to the budget, which seems to be the logic, rather than building a matching floor to the ceiling? Does he support that idea? Although I appreciate that he was not a Member of the House at the time, his party did not take that view in the Committee that dealt with that Bill.

Michael Gove: We do not take a crude majoritarian view on this matter. We believe that, in considering the acceptance or rejection of the budget, a majority of those serving on the Greater London assembly should have the right to accept or reject if they manage to garner a majority of votes. The proportional representation system that results in their election will ensure that a majority of GLA members represent, at the very least, a majority of those who cast their votes at the last election. In that respect, their majority will be built on surer foundations than, say, a parliamentary majority. We are seeking to add to the Bill the principle that the freedom to alter specific items in the budget should be extended and that scrutiny power should be given to the GLA, but only when two thirds can agree. We are asking not for a sweeping extension of powers to the GLA, but for an incremental improvement in its scrutiny powers.
I shall bring my remarks to a close, with thanks to the hon. Gentleman for his intervention, because he is inviting me to return to the philosophy behind our proposal, which acknowledges that, overall, the Bill will enhance and extend the Mayor’s powers. When powers for the Greater London authority were first conceived, it was acknowledged that the Mayor and the assembly would have an equal mandate. As the Mayor’s powers grow, the assembly’s scrutiny role should grow as well. That is implicit in the acknowledgement in clause 12 of a separate budget for the assembly.
We want to ensure that the separate scrutiny budget is used effectively in scrutinising the budget overall by giving the assembly the power to amend or reject it by a simple majority and giving it a line-item veto on a two-thirds majority. Needless to say, that power is welcomed by the majority of members of the Greater London assembly. I hope that the Minister will look favourably on this, our latest attempt to improve and enhance the scrutiny powers of the GLA and to give Londoners a more effective voice in their own governance.

Tom Brake: The debate on the amendments could be a lot simpler than the amendments suggest. The amendments to the formula are complex, as are the formulae in the Bill. It all boils down to delivering a pledge made by the Government in a policy statement from the Department for Communities and Local Government issued in July 2006, after the consultation exercise, which says, in paragraph 3.14.4:
“The Assembly will...Be able to set its own budget”.
The amendments are about assisting that process. It is worth highlighting the fact that the Government’s other proposals, on which they have delivered, include the assembly publishing an annual report and its being
“able to hold non-binding confirmation hearings”.
The amendments are about assisting the Government in delivering their own pledge.
The Government are spoilt for choice in terms of which amendment they might like to support. They could go for a proposal that we have debated at some length: that the assembly members should be allowed by simple majority to vote in favour of the Mayor’s budget, which feels like the appropriate, democratic thing to do. A number of Government Members have questioned whether that is right and whether we should stick to the two-thirds majority that is required now to overturn the budget. However, one must ask, why two thirds? What is the secret behind it?
A majority is something that we all recognise; it is the way that we operate in the House. I was tempted to stray and ask how we as Members would feel if the Government’s Budget could be overturned only by a two-thirds majority, although you have blocked that particular avenue, Mr. O’Hara. We would find it frustrating.
It is proposed that the assembly should be allowed to approve by a simple majority a draft component of the budget. There are complicated formulae, depending on whether a formula provides a floor or an envelope. All of them are proposals that the Government could adopt to allow the assembly much greater scrutiny over the budget and a greater sense of security about its own budget. It is entirely possible that a future Mayor, or indeed the current one, could decide that although he wants to continue increasing his budget, he feels that it is to his advantage to reduce the assembly’s budget, because he finds the scrutiny that it undertakes embarrassing or unsettling. Nothing in the Bill would prevent that from happening. At present, there is a ceiling on the assembly’s budget, but nothing that would safeguard it should the current or a future Mayor decide to restrict severely the assembly’s spending and budget year after year.

Greg Hands: I am slightly unclear whether the hon. Gentleman’s party supports the proposal to reduce the threshold from two thirds to 50 per cent.

Tom Brake: We support it entirely. I have tabled an amendment that would allow the assembly to reject the Mayor’s budget by a simple majority. It is our view that that is the democratic way of doing things. However, I am saying that there are a range of amendments, all of which address the budget in slightly different ways. Some address the overall budget and some its components. Some would ensure an envelope within which the Mayor could not adjust the assembly’s budget. Some would ensure that if the Mayor increased his own budget, the assembly could make a similar increase, or should not be restricted by his plans.
I hope that the Government will consider the amendments and find that they would strengthen democracy and provide the greater scrutiny needed to offset the increase in the Mayor’s powers that will result from the Bill. I shall listen carefully to the Minister’s response. I hope, because of the way he cheered up the Committee by suggesting a draft amendment to amendment No. 38, that he might be willing to suggest a draft amendment relating to the Mayor’s budget.

Andrew Pelling: First, I shall approach some of the amendments that have found their way to the Committee in the context of support either from a majority or from all members of the London assembly. This afternoon, we have already secured the passage of clause 12, which will provide the assembly with the ability to set its own budget, bringing it in line with other devolved assemblies.
In the context of the two-thirds majority rule, there is the danger that the assembly will in practice be left unable to divine upon its own budget. The proposed process confuses the assembly’s role in respect of the Mayor’s budget for the entire GLA family, which comes from expenditure of more than £10 billion and will obviously be higher after the reforms in the Bill come in, with its role in determining its own requirements and resources.
The power to amend the Mayor’s proposed budget for the assembly by a two-thirds majority will enable nine members out of 25 to decide whether the Mayor’s proposed budget for the assembly should be amended. Thus, the assembly itself will not be in control of its own destiny in progressing its own budget on its own decision. That does not serve the Government’s good policy intentions of allowing the assembly to set, or even to protect, its own budget.
When the Mayor was quizzed at the London assembly on 13 December, he said that he did not consider he should have anything to do with the assembly’s budget. The Bill includes complex formulae that set an upper limit—a ceiling—on the Mayor’s ability to amend his proposed budget for the assembly, but it does not set a floor, or lower limit. To theorise for Labour Members, a Conservative Mayor might cut a very large part of the assembly’s budget because there is no protection, or floor. Effectively, there is no meaningful protection should the Mayor propose unreasonable cuts to his budget, either in one year or cumulatively over time.
The Bill contains no provision for the assembly to determine the allocation of resources within its overall budget. Instead, the Mayor could decide to transfer significant resources within the assembly’s budget, perhaps to the disadvantage of the assembly’s individual party groups or, if he or she were feeling the heat, to take away resources that would give attention to areas of scrutiny that he felt were giving him too much trouble.
Amendment No. 43 would put in place a floor below which the Mayor could not reduce the assembly’s budget in any one year by ensuring that the Mayor could propose to reduce the budget requirement for the London assembly only when he was proposing to reduce the Mayor’s component budget requirement, and then only by as much as the Mayor was reducing his own mayoral component budget. Thus, if the Mayor were proposing to reduce his budget by 2 per cent. on the current year’s figure, he could propose to reduce the assembly’s budget only by a maximum of2 per cent.
I recognise that the Government were very conscientious in their original consultation, but during that consultation the assembly sought a means of protecting its resources from a Mayor who might seek to cut them if it was particularly effective in holding that future Mayor to account. The Bill proposes that that protection be provided by giving the assembly the ability to set its own budget in certain circumstances by amending the proposed assembly component budget put forward by the Mayor.
 As the hon. Member for Carshalton and Wallington said, large sections of the Bill contain complex formulae, the sole purpose of which is to impose a ceiling on the amount by which the elected members of the London assembly could, if they were able to achieve the support of two thirds of members of the London assembly, amend the budget for the assembly proposed by the Mayor. However, while a ceiling is proposed for the assembly, there is no such limit on the amount by which the Mayor might seek to reduce the assembly’s budget.
The amendments would not prevent the Mayor from proposing any reduction in the Mayor’s budget. It must be right that where there is a general reduction in the GLA’s spending, the assembly should have to bear its proportion of any such reduction.

Stephen Pound: The hon. Gentleman has a great deal of credibility with Labour Members based on the assumption that he is related to the author of histories of the Labour party and British trade unions. He may not be, but he still has credibility. Does he not accept that there would be a fundamental recasting of the twin-pillar roles of executive and scrutiny were his amendment to be carried? Does he not accept that the 1999 Act enshrined those different responsibilities and strengths in legislation precisely to differentiate between the executive and scrutiny roles? Does he further accept that his amendment would recast that in a way that the drafters of the Bill and those who voted for it did not intend?

Andrew Pelling: I have enjoyed reading the Pelling books, even if these days they are rather ancient history in view of what the new Labour party stands for. Obviously, I must take guidance from the debate on the 1999 Act, but we should also take cognisance of the response of Londoners to the assembly over the last seven years. We often hear the question, “What are you doing to stop that Mayor increasing our tax?”.

Stephen Pound: Do not vote for him.

Andrew Pelling: Well, the Mayor does say that if people want to vote for an old-fashioned socialist, they should “vote for me”. However, it is difficult to explain to voters who made the effort to turn up at the polling station, and perhaps also voted in the London assembly elections, as well as voting for the Mayor, that they have to bring together a coalition of the far right—in the form of UKIP—and of Conservatives, Liberals and Greens to be able to cap that increase in demand on London taxpayers. That is far too Quixotic a target to be set for the London assembly if it is to retain credibility with the London electorate.

Greg Hands: Does my hon. Friend agree that one problem with the current system is that the swing votes on the assembly are held by the Green party? If there were a Conservative Mayor, the swing votes might well be held by UKIP and by One London, or whatever it calls itself. Having a much more mainstream requirement of 50 per cent. would help to give the balance of power to more centrist parties such as our own.

Andrew Pelling: My hon. Friend makes a good point. The London assembly’s credibility with the electorate will be at issue if it is never able to deliver any change to the mayoral budget through the budgetary process. I had the pleasure of being the chairman of the budget committee when we came closest to securing the two-thirds majority required. It was a great pleasure to get the Greens, UKIP, Liberals and Conservatives voting together on one of the two occasions—a two-thirds majority has to be obtained twice within a month to apply the legislation—and I know that it made the Greens physically sick to find themselves voting with Conservatives on such a proposal. But the reality is that there is no credibility left in the process. The assembly’s ability to hold the Mayor to account is damaged if its ability to change the mayoral budget has no credibility.

Stephen Pound: I am sorry to keep revisiting the past, but in modern politics only the future is certain—the past is changing all the time. One thing that did not change was the Conservatives’ opposition to there being an assembly at all. Their original proposal was to have just a Mayor; they did not want an assembly because they felt that that would be an unnecessary duplication. How can the hon. Gentleman persuade me, and others who are wobbling under the torrent of his oratory, that his comments are not predicated more on the personality of the current incumbent at City hall than on the general principle, as they are at such wild variance with the view that the Conservative party held not many years ago?

Andrew Pelling: My recollection is that when my hon. Friend the Member for Croydon, South (Richard Ottaway) spoke in the debates on the assembly, he made some interesting and valid points about the attractions of the assembly being made up of leaders of local authorities. That proposal had many merits, and it would have bound together the two separate layers of local government in London. However, the hon. Member for Ealing, North has misrepresented our approach to the Bill in that we are far more enthusiastic than his party about devolving power to the Mayor and giving him extra powers in areas such as NHS London and learning and skills councils. I do not think that I have to take any lectures from him on that point.
On the budgetary process, we have seen that there are real difficulties in relation to the budget committee and London assembly members taking advice from officers who serve both as GLA members and on the London assembly. Tony Travers has come up with the extremely interesting idea of copying the New York City assembly, which has a separate finance and performance office. If the assembly were to do that, it would secure much more effective scrutiny of the budget in terms of independent advice.
Having been drawn into the more controversial discussion on the two thirds rather than 50 per cent. rule, I hope that consideration will be given to the way in which the London assembly has been made toothless as a result of the application of the two-thirds rule for looking at the overall budget. There are strong arguments, in terms of the effectiveness of the assembly, for providing for line-by-line amendments. The Mayor, supported by legal advice, has been able to interpret the previous legislation as enabling himto move moneys from any part of the GLA family to another. Had the assembly successfully voted against a particular budget, it would have found that the Mayor was able to get round its proposals very readily.
Moving to a situation in which the assembly has line-by-line powers would allow for more effective scrutiny and give a more effective voice to the assembly that London voters have chosen. There is another way, and it is a matter of practical politics. In the first year, the Conservative group suggested some mild reductions in expenditure on the substantial number of press officers in the Metropolitan Police Authority, which was misrepresented as an appalling assault on the police service in London. As a result of that experience, all political parties on the London assembly have stood back from debating the budget of the Metropolitan Police Authority for fear of being so misrepresented. However, if there were line-by-line powers, restricted by the constraint of needing to secure the high target of a two-thirds majority, London assembly members might well be empowered to be more robust in debating efficiencies within the MPA.
I would like to return to areas of somewhat greater consensus, which there was on some other proposals that my hon. Friends and I have made today. My amendments propose that the assembly should be in a position to amend its own budget by a simple majority. Amendments to the budgets of the other five component bodies would still require a two-thirds majority. The Government intend the assembly to have the ability to set its own budget. Given that large parts of the Bill are given over to complex formulae designed to impose strict ceilings on the amount by which the assembly could increase the budget, the requirement to obtain a two-thirds majority in this case is unnecessary and counter-productive.
Under the arrangements proposed in the Bill, the Mayor will propose a budget for the assembly andthe five other component bodies. Giving the assembly the ability to amend the Mayor’s proposed budget by achieving a two-thirds majority would, in effect, enable nine out of 25 members to prevent changes to that budget. As a result, the Mayor and a minority of assembly members could set the assembly’s budget together, which would not serve the Government’s policy intention of enabling the assembly to set or protect its own budget.
Finally, I want to refer to new clause 19, on the assembly allocating its own resources, which is being taken in this group. The Bill proposes separate component budgets for the assembly and the Mayor. New clause 19 would enable the assembly to determine the allocation of resources within its own budget. Under the current arrangements, the Mayor proposes the budget for the GLA, and whereas the assembly can amend the figures for the five component budgets and the overall figure, it cannot change the line-by-line budget heads that make up the individual components. The new clause does not seek to change the situation, as it applies to the existing five component budgets, but if there is to be a separate budget for the assembly, it would be nonsensical if the assembly were unable to decide how that budget should be spent to support it in carrying out its functions as set out in the 1999 Act.
Unless such provision is made, it would be possible for the assembly to set its own budget but find itself in the bizarre situation that the Mayor could subsequently decide how that budget spent, because of how the previous legislation has been interpreted to allowthe Mayor to move moneys around from one part of the GLA family to another.
I hope that cognisance can be given to the importance of ensuring that the London assembly has credibility with London electors. I appreciate that it is important for London assembly members to be able to create that credibility themselves, but the overall policy of setting a two-thirds majority to build a secure budget leaves electors confused. They do not understand why the people whom they elected cannot secure change to London policy by simple majority voting—that is what people understand by democracy when they turn up and vote for politicians at elections—or why the two-thirds rule has to be continually enforced.

Bob Neill: I agree with everything that my hon. Friend the Member for Croydon, Central has said, and I shall not seek to repeat it. He speaks with particular authority, having served on the assembly’s budget committee for the whole seven years of its existence and having chaired it for two years. I doubt that anyone has greater practical knowledge of the implications of the budget process than my hon. Friend, and I hope that the Government will take his points on board, given that he has not put them forward in a particularly partisan manner.
I hope that I will be forgiven for straying a little by saying that it is ironic that Government Back Benchers have contrasted the view that we took some years ago with the argument put from this side of the Committee now. Those on this side appear to be showing greater faith in the assembly and a greater willingness to enhance its role than some Government Back Benchers. That is ironic, but time moves on and some of us are prepared to learn from experience.
 Stephen Pound rose—

Bob Neill: I give way to the experience of the hon. Gentleman.

Stephen Pound: May I move us forward to 8 January 2007, when, under the headline, “Bulletproof in Bromley”, an interview with the hon. Gentleman was spread across many a page of The House Magazine? It included the sentence:
“It can be quite frustrating as an Assembly member, as it is there simply to scrutinise.”
May I say that the hon. Gentleman is absolutely correct in that analysis? He is perhaps straying away from that veracity in his words in Committee.

Bob Neill: First, I compliment the hon. Gentleman on his taste in reading material. I am sure that he found it far more enlightening than the Fulham souvenir programme that he got last Saturday. I was stating the current situation. Many of us do not think that it is the best way forward and many distinguished independent academics, such as Tony Travers, whose grasp of London government issues is probably greater than that of any of us in this Room, also take the view that it would be have been desirable to take the opportunity presented by the Bill to effect a new and more mature devolution settlement in London. That might have given even greater powers to the Mayor than are proposed, but with concomitant additional scrutiny power for the assembly. Nothing that I am saying here contradicts anything that I have said recently in any publication, but I am grateful for the plug.
I wish to reinforce the point by saying that if London’s devolved system is to work, there must be a sensible partnership between Mayor, assembly and boroughs. We will go into that matter at later points in our consideration of the Bill. The 1999 Act gave the assembly a particular role in relation to the budget. The Government have said that some things should be re-examined in the light of experience, and we are saying that some elements of the budget should be re-examined in the light of experience, which is an intellectually coherent and responsible stance for us to take.

Andrew Slaughter: A coherent intellectual stance? I am genuinely confused now. When I attempted earlier—unwisely, no doubt—to debate with the hon. Member for Surrey Heath and said that the assembly was a scrutiny body, he pulled me up short and got into some chat about prostitution. Now the hon. Member for Bromley and Chislehurst seems to be saying that the assembly is a scrutiny body. Indeed, he stands by his comments in The House Magazine and is now talking about partnership. Which is it, and what is the Conservative policy? Is it scrutiny, is it executive or is partnership? What do they want?

Bob Neill: If the hon. Gentleman does not recognise that effective scrutiny can sometimes best be done by partnership and on the basis of mutual respect between two bodies, he is always going to be confused about the matter and I suspect that I shall be unable to help him. Of course there is no contradiction, and if he were to give the matter more thought, he would realise that. We are interested in making the assembly’s role in the scrutiny and approval of the budget, which is its statutory function, more effective. The two things are not contradictory.
One argument that Government Members seem to deploy against enhancing the assembly’s role, and indeed against all our amendments, is the suggestion that they run up against the strong-Mayor model. We do not have a problem with that model, and the argument is factually inaccurate. Such a model does not mean that the assembly should not, for example, have the power to amend the budget by simple majority. The most obvious strong-Mayor model is in the city of New York, where I led a delegation of assembly members representing all the principal parties during the summer recess to talk to those involved in the budget-setting process. We met the mayor and his representatives and the chairman of the budget committee and its representatives and advisers.
The city council in New York, the equivalent to the assembly, has the ability to amend the budget by a simple majority. On several occasions in the recent history of New York, the mayor and the city council have been of different political persuasions, but the phrase used was that such a position has “never caused any gridlock in the New York political process”. The fact that the mayor has to have a majority for his budget prepares him to take into account the worries of the parties in the city council at an early stage in the budget-setting process, which makes for a fairly mature development of the process.
If Rudy Giuliani and Michael Bloomberg can operate on a strong-Mayor model with a city council that could overturn their budgets by a simple majority, I cannot for the life of me think why any Mayor of London, present or future, could not also do so. Moreover, I doubt that any of my constituents could think of a good reason either. The argument that the Mayor’s executive role is clearly appreciated and so on is rather academic. When I talk to constituents in either role and explain as factually and in an unbiased fashion as I can—I am sure that hon. Members appreciate that I always take that approach—that the Mayor’s budget was debated, that 16 members voted against it and nine members voted for it and that it was passed and has come into law, their description of that process is generally to use a term that was yesterday ruled in the Chamber as parliamentary, but one thatI will not repeat here today. They find such circumstances inconceivable. It is not healthy to have a budget-setting process that the ordinary London resident and voter finds inconceivable.

Martin Linton: The hon. Gentleman led Conservative members of the GLA to vote against money for the safer neighbourhood teams, but does he now wish that he had prevailed by a simple majority and that the safer neighbourhood teams had never been created?

Bob Neill: If the hon. Gentleman wants to use specific examples, he should at least have the decency to get them right. The Conservative group on the assembly never voted to reduce money for the safer neighbourhood teams. In fact, when I proposed that alternative budget, the Conservative group sought to put more money into the budget for more police officers and more safer neighbourhood teams. If the hon. Gentleman intends to make a bad point, will he at least try to make an accurate bad point not an inaccurate one?
In reality, the best possible international comparator of the strong-Mayor model is, because of its size and complexity, recognised overwhelmingly to be New York. It is not prejudiced by the ability of the city council—in our case, the assembly—to be able to amend the budget by a simple majority. We must knock on the head the idea that the strong-Mayor model must have that extra protection.
The line-by-line veto has been well argued, and I need not restate the case. Given the two-thirds protection, it is not something that offends against a strong-Mayor model. I think that I have now dealt with the incomprehension experienced by most ordinary Londoners about the present process.
Amendment No. 33 would give the assembly the power to set its own budget by a simple majority, which follows on more logically from the Government’s own thinking than does the current situation. The Government are right to say that it is sensible and desirable in the interests of greater transparency that the Mayor should set his part of the budget and that the assembly should set its part. There is good constitutional and political sense in that proposal. At the end of the day, the Mayor is accountable to the electorate for his budget. If Londoners think that his budgets have been too high—I hope they do that sooner rather than later—they will take a view and vote accordingly.
Similarly, if an assembly were to be ludicrously profligate, it would run the risk of paying a political price for spending its budget badly or taking too much in its budget. That is the point of flagging up the different roles and the different amounts that are spent. That is fine, and I have no problem with it. I have no problem either with the idea of the ceiling. It could be argued theoretically that there should not be a ceiling and that people could take their chance, but my hon. Friend the Member for Surrey Heath, on behalf of our party, has been realistic and practical about saying that, in the circumstances we are in, we will depart from that theoretically attractive proposition and settle for a ceiling, and not argue with the Government on that. There is nothing between us.
 There is a point in that if there is a ceiling it is perfectly reasonable to have a floor, for the reasons that have been advanced. It would be interesting to know by what logic there can be one and not the other. I make just this one important point in relation to the floor, which has been advanced by the London assembly: it might be said, “Oh well, other bodies such as local councils do not have the protection of a floor.” That is true, but the assembly’s situation is unique, in view of the Greater London authority. Other councils, after all, meet as a single corporate body and determine their budget by a simple majority. The Scottish Parliament, the Welsh Assembly and the other devolved bodies are in the same position. Due to the split of responsibilities, the assembly does not have that safeguard. Uniquely, it could have a budget foisted on it against its will. That is the difference and why it is appropriate to have a floor. I hope that no Mayor will go down that route, but we ought to be cautious about it.

Sitting suspended for a Division in the House.

On resuming—

Bob Neill: I was coming to my last point—I see a big grin on the Minister’s face—which will cheer him up as much as would the third or fourth goal going past the other side. That might happen at some point this year.
We accept the logic, in terms of accountability, of having the assembly and the Mayor setting separate budgets, albeit within the constraints of ceilings—and, I would argue, floors as well. That is a sensible way forward; it involves both the Mayor and the assembly in being prepared to pay a political price if they get it wrong. We accept that that is right and proper in a democracy. My point is that the assembly needs the protection of a floor because it is in a unique position, in that it can have a budget imposed on it. I cannot believe that it was the Government’s intention to leave it like that. The amendment is important because if we are going to say that the assembly should separately flag up its budget to the world and be politically accountable for that, then the assembly should be sovereign in deciding that bit of its budget. That is wholly separate from any argument about what power it has to amend the Mayor’s budget, and on what basis. 
I have already said that, for the reasons that have been set out, I agree with the arguments made elsewhere about the other powers to amend. However, if we are going to let the assembly have a separate budget component, which is going to be flagged up, the logic is that the assembly should decide that, not the assembly plus somebody else. If the Bill is not amended, the practical effect will be that the Mayor plus nine assembly members—a minority of the assembly—will be able to set the budget for the whole of the assembly. That is not logical. It is not necessary for the purposes of adhering to a strong Mayor model. If one is going to have the strong Mayor model, I can see the argument that one should only overturn his budget by a two-thirds majority. I might disagree, but I can see the point. However, if one says that in the strong Mayor model the assembly should none the less have the power to set its own separate budget component, surely it should have the power to do so without interference. It has been pointed out, however, that there could be a situation in which the Mayor came to a deal with a minority of the assembly to propose an assembly budget level that the majority of the assembly did not believe to be acceptable. Having secured that minority support, the Mayor might impose it on the majority.
The residents that I mentioned from my part of the world think that the basic budget-setting process is a bit convoluted, but the proposal would make things even worse. Surely the logical position is that, if one lets the assembly have its own budget component, it should choose that by a majority of its own members and sink or swim with the consequences. The electorate may think, “Fair enough,” or they may think, “No, I don’t agree with the amount they are spending, I’ll turf ’em out next time.” That is fine. If I were still an assembly member and were seeking re-election, which of course is not the case, I would be happy to live with the consequences. But why should I be liable in theory to be turfed out as a result of a budget that I could not set myself, because my wishes were overridden, not by a majority—I could live with that—but by a minority in cahoots with the Mayor?
That could happen regardless of who the Mayor was. The point was made that we should not make policy on the basis of personalities, and that is right, but I can conceive of scenarios in which the Mayor would be of a very different stamp from the current one, and might want to impose swingeing budget reductions. He might want to make major cuts in the assembly budget. In my judgment, it would not be democratic for such a Mayor to be able to push that on to a majority of the assembly whose views were different, just because the Mayor got nine of the 25 members to agree. Whatever the politics and ideologies of the Mayor, it works the same way—it is plain wrong. I cannot believe that the Government actually think it would be right to leave things like that and I hope that it was just an oversight in the Bill preparation. A simple majority is more transparent.
Finally, Mr. Travers, the academic to whom we have all referred, has said that, whatever its faults, the GLA budget process gives the opportunity of transparency. All of us would say that we should always seek greater transparency in amendments to the budgetary process. If we enabled the Mayor to cook up a deal behind the scenes with a minority of the assembly, and to impose a budget against the wishes of the majority, it would be the very antithesis of transparency. It would encourage behind-the-scenes dealing which would otherwise not be necessary. A simple majority means that the argument takes place on the floor of the assembly, and if the Mayor of London thought that the assembly had got its budget wrong, he would be entitled, as is the case for the Mayor of New York, to say, “That lot got their budget wrong , they are not to be trusted with their budget-setting powers. Electors, turf ’em out at the next election!” If it is good enough there, why not here? That is the thinking behind the amendment. I hope that even now the Government will think again.

Jim Fitzpatrick: I think that interventions by my hon. Friends—especially those by my hon. Friend the Member for Ealing, North—have helped clarify several of the fundamental issues that are at stake. One is whether a two-thirds budgetary requirement should exist. Another is whether there should be a strong executive Mayor or a stronger assembly. A further point is whether it is conceivable that, having separated out the assembly budget as a separate component, assembly members would not be able to vote collectively to protect their own separated and transparent budget. The Government certainly believe that assembly members can and would work in concert in that situation.
Before making some general comments on the amendments and new clauses, let me deal with the New York examples quoted by the hon. Member for Bromley and Chislehurst. I said earlier that we could benefit from his expertise, and, clearly, this is a case in hand.
 I am advised that, although it is true that council members in New York city can block the Mayor’s budget and develop their own policies, in practice what happens is that because New York city council members are numerous—there are 62 of them—and are all elected by local constituencies, they do not have the strategic city-wide mandate that our assembly has and therefore tend only to threaten to block the Mayor’s budget when they are seeking support on local issues. They threaten to block early on in the process, given that the effect of blocking would be to hold up city services and investment beyond their constituencies. They seek accommodations with the Mayor, and there will always be some horse trading, negotiations and accommodations being sought with any mayor. In their case, perhaps it is to gain additional resources for local budgets. They act as advocates of local agendas, not necessarily as sources of alternative city-wide policies.
In short, although council members can block the budget, they almost always do so only on a local-issue basis because of their local mandate. The model is quite different, although the hon. Gentleman has the benefit of having visited New York on a fact-finding mission, which I have not done, and studied it himself.

Bob Neill: That point has been made to me in the past, and it was made when I visited New York. It is also in some of the academic literature. Interestingly, that is exactly why, when the right hon. Member for Greenwich and Woolwich (Mr. Raynsford) took the Bill through the Committee process, he argued, first, that there should be a proportional system with London-wide members and, secondly, that the assembly constituencies should be much larger than the council districts in New York. There are safeguards in our system against the risk that a mayor, by resorting, in effect, to pork-barrel politics, which none of us would wish to encourage, would be able to overturn a city council’s legal power to intervene. In fact, our system meets the Minister’s concern because that is safeguarded against in our system through our London-wide proportional element and the larger constituencies. It means that the London assembly is better to be trusted with such a power than not.

Jim Fitzpatrick: If I may, I shall turn to the clauses before I respond specifically to some of the amendments and new clauses. Clause 13 amends schedule 6 to the Greater London Authority Act 1999 to include separate component budget requirementsfor the Mayor and the assembly in the procedurefor determining the GLA’s consolidated budget requirement. Schedule 6, as amended, requires the Mayor to prepare six component budgets: one for himself, one for the assembly and one for each of the four functional bodies. He is required to consult the assembly before preparing the Mayor’s and assembly’s draft budgets.
After the Mayor has prepared the draft component budgets, he must prepare a draft consolidated GLA budget and present it to the assembly. He must do so on or before 1 February in the financial year preceding that to which the draft consolidated budget relates. The assembly must approve the draft consolidated budget and the six draft component budgets it comprises, with or without amendment, by simple majority. However, the assembly’s powers to increase its own draft component budget by amendment is limited: its annual percentage increase must not be more than the annual percentage increase in the Mayor’s component budget. For example, if the Mayor proposes to increase his own budget by 5 per cent. compared with the previous year and proposes only a 1 per cent. increase in the assembly budget, the assembly may amend its budget by up to5 per cent.
The limit will ensure that the assembly cannot award excessive increases to its budget but can protect its resources. The Mayor, informed by the assembly’s consideration, must then prepare a final draft of the proposed consolidated budget which the assembly may either approve or amend by at least a two-thirds majority, as we discussed, before the last day of February in the financial year preceding that to which the budget relates.
Again, the assembly cannot increase its own final draft budget by amendment by a percentage increase greater than the percentage increase in the Mayor’s final draft budget. In order to deal with unusual one-off payments such as the Olympic precept, which was mentioned earlier, the authority’s chief finance officer may direct that specified amounts are left out of the budget requirement calculations for the purpose of
determining the limit. The Secretary of State may give guidance to the chief finance officer in respect of the exercise of that power.
Clause 14 makes similar provision to that which I have already set out for any substitute calculations that the authority is required to make. The GLA has similar powers to make substitute calculations to those of local authorities. The effect is that normally it is able to increase its precept only where previous calculations of its consolidated budget or component budgets are quashed by court proceedings or where the Secretary of State directs that the MPA budget should be increased.
The GLA’s budget setting process is now tried and tested. It allocates some £9 billion in funding per year and it has been shown to work. The changes will ensure that the new component budgets for the Mayor and assembly fit into that process smoothly and provide a clear and robust mechanism for determining the assembly’s budget.
I want to turn now to the amendments. First, let me make it clear that we do not accept them. I want to try to explain why. The current budget setting process for the GLA group works well and aside from allowing the assembly its own budget, which is set out in clauses 12 to 15, there is no need to make further fundamental change to the process. The two-thirds majority requirement on assembly amendments to the Mayor’s final budget in particular remains appropriate.

Greg Hands: Does the Minister share my concern that the swing votes on the assembly belong to the Green party in determining whether the Mayor’s budget goes through?

Jim Fitzpatrick: I am not sure that I agree that the swing votes are necessarily those of the Greens. The Mayor certainly has to win the support of a party other than his own in order to secure a majority, so I am sure that there will always be some discussions in the course of budget setting.
It is also sensible, as I was saying, to allow the assembly the right to amend the Mayor’s proposals in order to act as an important check on the Mayor. That is why the assembly can amend the Mayor’s draft budget by a simple majority. It is important, however, for the assembly to form a clear view on the merit of amending the Mayor’s final budget and for a broad cross-section of assembly members to be in favour of doing so. The requirement for a two-thirds majority accordingly ensures broad support in the assembly for any amendment to the final budget. Otherwise, allowing the assembly to amend the final budget—like the draft budget—by a simple majority would alter the balance of power at the GLA radically. It would weaken the position of the Mayor, and it could be a recipe for confusion. For that fundamental reason, we cannot accept amendments Nos. 33 and 34 and new clause 4. Nor can we accept amendments Nos. 41 and 42, which allow the assembly to amend specifically the final draft assembly budget by simple majority.
It would be inconsistent to allow the assembly to amend one part of the final budget through a simple majority while the rest of the budget requires a two-thirds majority for amendment, even if that part specifically concerns the assembly’s own budget. We are also unconvinced that new clause 16, which would explicitly require a simple majority for successful assembly amendments to the Mayor’s draft budget, is necessary. The requirement for a simple majority to amend the Mayor’s draft budget is already implicit in paragraph 5 of schedule 6, as the assembly have to agree an amendment under sub-paragraph (4). Accordingly, the amendment would only reinforce and clarify the existing legal position and it is therefore not necessary.
I know that Conservative Members are concerned that the assembly could not achieve the two-thirds majority needed to amend the Mayor’s proposed budget. That is a concern that we do not share. I cannot envisage the assembly being unable to muster a two-thirds majority to amend the final draft component budget for the assembly in the event of any Mayor proposing a difficult budget for the assembly, as all assembly members would have a strong common interest in ensuring that the assembly had the resources necessary to fulfil its functions effectively. That is why we strongly resist amendments Nos. 43 to 46 and amendment No. 60, which seek to set a minimum amount below which the Mayor could not propose draft and final draft budgets for the assembly. Such floors can confuse and can be difficult to understand. In this case, we do not believe that they are necessary.
As I have explained, there is a mechanism to enable the assembly to amend an excessively low assembly budget proposed by the Mayor by a two-thirds majority. We do not accept new clauses 17 and 18, which would extend the assembly’s power to amend component budgets to a much more detailed level. The amendments cut across the Bill’s policy aims, which are to allow the assembly to set its own budget but not otherwise to change a system proven to work well. They risk making a complicated system even more complex, and would set in stone subtotals in the budget calculations that must remain flexible within the amounts agreed as component budget requirementsfor the Mayor, assembly and functional bodies. The GLA’s functional bodies and the GLA itself must have flexibility to deal with changes in financial circumstances and any spending needs that emerge during the financial year.
New clause 19 states explicitly that the assembly can allocate moneys as it sees fit within its own agreed component budget total. The new clause is unnecessary. It is clearly within the spirit of the Bill’s changes that the assembly should decide how its budget is spent, within the agreed total of the assembly component budget. In addition, since the assembly can do anything incidental to the exercise of its functions under section 34 of the 1999 Act, the assembly has a legal basis for making such a decision. I therefore ask hon. Members opposite not to press their amendments, and encourage my hon. Friends to vote them down if they do.
 Michael Gove rose—

Edward O'Hara: Order. This has been a complex debate on a complex set of amendments. It would be helpful if the hon. Member for Surrey Heath would indicate which of his amendments he wishes to press to a Division.

Michael Gove: Thank you, Mr. O’Hara, for that courtesy. I apologise for arriving after the time specified. You specified ample time; it was discourtesy on my part, for which I alone am responsible. I apologise to you and to the Committee for that discourtesy, and I hope that it will not happen again.
In the spirit in which you asked me to do so, Mr. O’Hara, I will explain the amendments that we wish to push to a Division. We would like to divide on amendment No. 43. If it is carried by some happy chance, we will then push amendments Nos. 44 to 46. However, if amendment No. 43 is lost, then Nos. 44 to 46 will no longer be valid.
Amendment No. 60 was tabled by the Liberal Democrats. I hope that they will push it to a Division, but it is for them to decide whether that is appropriate in the circumstances. I shall then press amendmentNo. 41. If we lose amendment No. 41, amendment No. 42 will fall automatically. We will then move to the new clauses.

Edward O'Hara: Order. The new clauses will come later. When they do come, they will be moved formally, as debate has taken place.

Michael Gove: Thank you, Mr. O’Hara. I shall not detain the Committee any longer by outlining our proposals for the new clauses, but given what we have said, I suspect that you can probably infer what we will do. I shall clarify the matter when the appropriate moment comes.
I am disappointed that the Government have not considered it appropriate to embrace the spirit of the amendments that the Opposition have been trying to move. The Minister said that the budget-setting process is tried and tested. By the same argument, the process of setting staff limits, numbers and indeed terms and conditions is tried and tested, yet the Government wish to amend that and not this. It is curious. Whenwe propose to defend the assembly’s rights, the Government say, “Well, it might be tried and tested, but we want to see a shift in power from the assembly.” When we propose to strengthen the assembly’s powers in a new way, they say, “Things are tried and tested. There is no reason to move in that direction.” The only consistency is the Government’s attachment not to what is tried and tested but to having the assembly’s teeth drawn—or, when we propose that the assembly should have more teeth, to add no more teeth to its bite.

Jim Fitzpatrick: That something is tried and tested does not mean that it cannot be improved. The hon. Gentleman indicated that he wished for something to be improved that we believed was tried and tested, and we decided that we did not wish to make the change that he proposed. These are straightforward differences of opinion; I do not think that there is any inconsistency in the philosophy behind our arguments.

Michael Gove: Indeed there is no inconsistency in the Government’s philosophy, but it would be a mistake to think that their philosophy is to defend that which is tried and tested. Their philosophy is perfectly clear: more powers for the Mayor? Yes, under certain circumstances. More powers for the assembly? Certainly not—those impertinent figures should know their place. That seems to be a misunderstanding of the original spirit of the 1999 Act and of what Londoners expect from both wings of the GLA.
My hon. Friend the Member for Bromley and Chislehurst made an important point when he used the examples of the Welsh Assembly, the Scottish Parliament and, in particular, New York. The Minister’s response was not convincing. He displayed an authoritative grasp of how New York’s assembly works, but the more he explained how it works, the more he vindicated the position of my hon. Friend.
The Minister pointed out that representatives in the New York City assembly operate on a territorial basis. When they seek to amend the budget, they do so because they wish to preserve their constituents’ interests, or to get more pork for them from the municipal barrel. Their operation is entirely constituency oriented. As my hon. Friend pointed out, the GLA operates in the interests of London overall, so when it seeks to amend the budget, it is not in a spirit of partisanship and members are not saying, “My constituency must come first and Deil take the hindmost for all the rest.” It operates in a constructive spirit, so why should a system that functions well in New York, albeit with a group of individuals who may put their constituencies first, not apply in our own capital city when we have so constituted the assembly that it puts the interests of all Londoners first?
In discussing how all Londoners are put first, I should say that the intervention of the hon. Member for Battersea, who mentioned safer neighbourhoods, was singularly inappropriate. By introducing our line-item veto, we seek to create the opportunity for members of the assembly specifically to protect, or indeed enhance, items of the budget without allowing the Mayor to say that their opposition to the budget overall is opposition to each individual part.
We in this Committee are engaged in the exercise of saying that we object to certain parts of the Bill but agree with others. Anyone who takes an interest can draw a distinction between the fact that, for example, the Liberal Democrats and the Conservatives are concerned about planning powers, and the fact that they take a slightly different position on one or two other issues. People can draw appropriate and legitimate inferences from that process. The absence of a line-item veto would make it possible for the Mayor to draw a blanket over opposition to particular items in the budget and say that members of the assembly oppose item A when it is item B or C to which they object.
I particularly want to invite the Minister and his colleagues to think again about amendment No. 33. The Minister devoted some time to explaining why he felt that the assembly collectively could safeguard its interests under the current provisions. I underline the point that was made by my hon. Friends the Members for Bromley and Chislehurst and for Croydon, Central: at moment, the Mayor, acting in concert with one political group, or one political group and a small and—as my hon. Friend the Member for Hammersmith and Fulham pointed out—potentially fringe party, can alter the budget in such a way as to penalise the assembly.
The point of the amendment is to allow the assembly to safeguard its budgetary allocation. I accept that some people on the Government Benches may believe it appropriate for the Mayor to set his own budget without the enhanced scrutiny powers that we ask for being given to the assembly. I understand that, although I disagree with it. However, I cannot understand why the Government refuse to allow the assembly, in relation to its own budget, to protect by a simple majority the money that it needs for its scrutiny functions from a potential raid mounted by the Mayor and a political party with which he or she might be working in concert.
I issue a plea to Government Members: although they might not see merit in all our amendments—I would like to say something about new clause 19 in due course, if the opportunity arises—I hope that in respect of amendment No. 33 they might see the merit of what we are proposing.

Tom Brake: I would like some guidance from you, Mr. O’Hara. I would like to press amendment No. 60 to a vote, if that is deemed appropriate. I suspect that the Government’s response will be similar to the one that we received to amendment No. 43, in that we are talking about a complex formula for trying to ensure that the assembly’s budget is not varied by a disproportionate and damaging amount.

Edward O'Hara: We were consulting frantically as the hon. Gentleman was talking. If amendment No. 60 were an alternative to amendment No. 43, one might press it to a vote, but it is additional to it, so if amendment No. 43 falls, amendment No. 60 would fall.

Tom Brake: Thank you, Mr. O’Hara. Amendment No. 60 is similar to amendment No. 43, but there are some differences.

Edward O'Hara: I must apologise; I was consulting as the hon. Gentleman was talking and I was looking at the wrong amendment. I shall use my discretion and say that there is sufficient difference to press amendment No. 60 to a Division, should the hon. Gentleman wish it.

Tom Brake: Thank you, I would like to do so.

Edward O'Hara: We shall now dispose of amendment No. 43.

Question put, That the amendment be made:—

The Committee divided: Ayes 7, Noes 10.

Question accordingly negatived.

Amendment proposed: No. 60, in clause 13, page 13, line 12, at end insert—
‘(5A) After paragraph 5A insert—

“Limit on the Mayor’s powers to prepare a draft budget for the Assembly

5B (1) In exercising his powers to prepare a draft component budget for the Assembly under paragraph 2 of Schedule 6 above, the Mayor must not prepare a draft component budget for the Assembly if the draft component budget contravenes sub-paragraph (2) below.
(2) The Mayor’s draft component budget contravenes this sub-paragraph if—
(a) the draft component budget for the Assembly is less than
(b) the minimum draft component budget requirement for the Assembly.
(3) Find the minimum draft component budget requirement for the Assembly as follows.
(4) If NM is greater than OM (as calculated under sub-paragraph (5) of paragraph 5A of Schedule 6 to this Act)—
(a) find the percentage by which NM is greater than OM, and
(b) reduce the amount of the component budget requirement for the Assembly for the previous financial year by the same percentage.
The result is the minimum draft component budget requirement for the Assembly.
(5) If NM is less than OM (as calculated under sub-paragraph (5) of paragraph 5A of Schedule 6 to this Act)—
(a) find the percentage by which NM is less than OM, and
(b) reduce the amount of the component budget requirement for the Assembly for the previous financial year by the same percentage.
The result is the minimum draft component budget requirement for the Assembly.
(6) If NM equals OM (as calculated under sub-paragraph (5) of paragraph 5A of Schedule 6 to this Act) the minimum draft component budget requirement for the Assembly equals the amount of the component budget requirement for the Assembly for the previous year.
(7) Sub-paragraphs (9) to (11) of paragraph 5A of Schedule 6 to this Act (power of chief finance officer to direct amounts to be left out of account) also have effect for the purposes of this paragraph.’.—[Tom Brake.]

Question put, That the amendment be made:—

The Committee divided: Ayes 7, Noes 10.

Question accordingly negatived.

Clause 13 ordered to stand part of the Bill.

Clause 14 ordered to stand part of the Bill.

Clause 15

Deemed component budget requirements for last old financial year

Question proposed, That the clause stand part of the Bill.

Jim Fitzpatrick: The clause is a transitional provision that is needed so that the limit on the amount by which the assembly may increase its own component budget requirement in the first year in which the new arrangements operate can be calculated. The clause provides for the GLA’s chief finance officer to designate amounts as the component budget requirements for both the Mayor and the assembly for the financial year preceding the first financial year in which the new arrangements will operate.
There is currently one component budget for the GLA; component budget requirements are not calculated separately for the Mayor and the assembly, as we know. For the first year of the new arrangements, the budget requirements of the Mayor and the assembly will not be known. For the percentage increase in the Mayor’s and the assembly’s budgets to be calculated and for a limit to the amount that the assembly may increase its own budget to be set,the chief finance officer must designate the amounts of the Mayor’s and the assembly’s component budget requirements for the previous year. The chief finance officer must make her designation no later than31 December in the year preceding the first financial year of the new arrangements and must consult the Mayor and the assembly before doing so.
The clause will ensure that the new arrangements for separate budgets for the Mayor and the assembly may operate smoothly and sensibly in the first year of their operation.

Question put and agreed to.

Clause 15 ordered to stand part of the Bill.

Clause 16

Exercise of Mayor’s functions when temporarily unable to act

Question proposed, That the clause stand part of the Bill.

Jim Fitzpatrick: The clause provides for the deputy Mayor to exercise the Mayor’s budget-setting functions if the Mayor is temporarily unable to act. Under part 3 of schedule 4 to the 1999 Act, the deputy Mayor can already exercise many functions of the Mayor if he is temporarily unable to act. However, that does not extend to the Mayor’s budget-setting functions. Those functions are taken on by the assembly if the Mayor is temporarily unavailable.
The clause extends the role of the deputy Mayor to include the Mayor’s budget-setting functions under schedules 6 and 7 to the 1999 Act. It also provides that for the period during which the deputy Mayor exercises the Mayor’s budget-setting functions, she shall not carry out any of the functions of an assembly member in relation to setting the budget. Furthermore, the clause prevents the Mayor’s budget-setting responsibilities from transferring from the Mayor to the chair of the London assembly if there is no deputy Mayor.
The budget-setting process works by engaging both parts of the authority; the Mayor proposes the budget, which the assembly can amend by two-thirds majority, as we discussed extensively earlier today. The change will ensure that the assembly is not judge and jury in respect of its own budget if the Mayor is temporarily unable to act. In that event, the deputy Mayor will fulfil the budget-setting functions of the Mayor, proposing a budget that the assembly can amend by a two-thirds majority.

Andrew Pelling: I seek clarification of what would happen if both the Mayor and the deputy Mayor were incapable of acting.

Jim Fitzpatrick: In the unlikely event of there being no Mayor, or his being temporarily unable to act, and the deputy Mayor being unavailable, delegating the Mayor’s budget-setting functions to the chair of the assembly would serve no useful purpose. If the deputy Mayor assumes the Mayor’s budget-setting functions, she will not carry out any of the functions of an assembly member in relation to the budget. If she is unavailable, the assembly itself will fulfil that function, requiring the chair of the assembly to propose a budget, which the assembly itself could amend by a two-thirds majority. That explains the position.
The clause provides an appropriate check and balance in the budget-setting process in the event of the Mayor being temporarily unable to act.

Tom Brake: Will the Minister clarify who makes the decision about whether the Mayor is temporarily unavailable?

Jim Fitzpatrick: We have procedures in respect of the Standards Board. We are consulting at the moment, and legislation is going through to amend those purposes. If this is not entirely clear now, it will be in due course. At present, the Standards Board for England is empowered to determine whether an elected officer is able to fulfil their duties and functions.

Michael Gove: I am grateful to the Minister for his explanation. However, as suggested by the interventions from my hon. Friend the Member for Croydon, Central and the hon. Member for Carshalton and Wallington, that explanation, while fine as far as it went, begs one or two questions.
On the nature of the circumstances in which, as my hon. Friend pointed out, both the Mayor and the deputy Mayor may be unable to act, the Minister said that the chair of the assembly should be responsible for introducing the budget. Part of the debate among Government Members was about the importance of maintaining a pristine distinction between those charged with executive functions and those who are part of the scrutinising body.
 The clause makes it clear that when the deputy Mayor is responsible for introducing the budget, he or she absolves themselves of their assembly role and takes on a quasi-executive function. What ramifications will it have for the chair of the assembly if he or she is called upon to introduce the budget? In the event of the Mayor and the deputy Mayor being unavailable, at what stage in the budget-setting process will the chair, who will introduce the budget, have the power to acquire executive responsibilities?
We are pursuing this matter because an attempt is being made to provide for the eventuality of the Mayor being unable to act. We all appreciate the importance of the strong-Mayor role, but while the Government are anxious to ensure that there is a difference or distinction, it seems that that distinction or difference would be blurred in those admittedly unlikely but important circumstances.
Some clarity or clarification may be helpful on the circumstances under which the Mayor might be unable to act. The hon. Member for Carshalton and Wallington drew attention to that implicitly in his intervention. The Minister explicitly acknowledged the action of the Standards Board, which deprived the Mayor of his powers a little while ago. While we all deprecate the circumstances that created that situation, we have to recognise that the Government have so far been insufficiently clear on how the functions—

Edward O'Hara: Order. I have been extremely generous, but this has been an extremely long intervention. The hon. Gentleman is intervening on the Minister.

Michael Gove: No, Mr. O’Hara, my understanding is that I am replying to the Minister. Forgive me.

Edward O'Hara: Forgive me.

Michael Gove: You would have been absolutely right, Mr. O’Hara. That would have been an extraordinarily long intervention and you would have been exceptionally kind to have allowed it to go thus far.
It would be useful for the Minister to give some indication as to how reform of the Standards Board might proceed. I appreciate that he is no longer at the Department for Communities and Local Government, but it would be appropriate, given his Front-Bench responsibilities, for him to give us some information on that.
I come to what would happen if the Mayor were to become incapacitated for other reasons—for example, if he were to find himself embroiled in criminal proceedings or if he were, for whatever reason, to find himself incapable of discharging the functions of the mayoralty, either physically or mentally. Conservative Members will later propose a new clause that deals with the principle of a recall amendment, so I shallnot go into the details now. It would deal with circumstances in which, in the view of Londoners, the Mayor was palpably no longer capable of discharging his duties. It would be helpful if the Minister explained what would happen—more broadly, and not only with regard to the budget—if the Mayor was found to be incapable of discharging his or her duties.

Jim Fitzpatrick: I am grateful to the hon. Gentleman, who has given me a chance to read my notes and perhaps to correct a false impression that I might have created. Reform of the Standards Boardis set out in the Local Government and Public Involvement in Health Bill, which will come forward in due course. If the Mayor and the deputy Mayor are unavailable, the 1999 Act applies, which means that the assembly will set the budget. In case there was any confusion over my response, I should say that we are not changing that position.
Schedule 4 to the 1999 Act states that if the head of paid service becomes aware that the Mayor is temporarily unable to act—if he is suspended or ill—he should give notice to the chair of the assembly and the deputy Mayor. There is an important distinction to draw to the attention of the Committee, which is that between a Mayor being temporarily unable to act and a vacancy in the office of Mayor. If there is a vacancy, a by-election will be called. A new Mayor might be elected, who might appoint a new deputy Mayor. If that happened during the budget-making process, from December to February each year, only the assembly could provide continuity in that process. We believe that such continuity is important. We therefore do not intend to change the current arrangements.

Question put and agreed to.

Clause 16 ordered to stand part of the Bill.
 Further consideration adjourned.—[Jonathan Shaw.]

Adjourned accordingly at twenty-three minutes to Seven o’clock till Thursday 11 January at half-pastNine o’clock.